Europeans Heat Up Costa Rica’s Export Growth

Export growth cycled up strongly in February from January’s light growth, coming in at 15.7% compared to February 2007.

Leading the growth was a jump in trade with the European Union, as well as strong performance in coffee exports.

Cumulative growth for the year so far now stands at 9.7%, according to numbers from the Foreign Trade Promotion Office (PROCOMER).

Lagging behind, however, is month-onmonth export growth to the United States, which registered a mere 0.31%. January month-on-month exports to the U.S. actually shrunk, by 6%.

“The performance of the U.S. market as an export destination reflects the economic slowdown being seen in that country, as well as the delay in implementing the (Central American) Free-Trade Agreement (with the United States),”Foreign Trade Minister Marco Vinicio Ruiz said in a written statement.

The United States buys nearly 40% of Costa Rica’s exports.

Export growth to EU countries came in at around 30%, with $149 million in goods crossing the Atlantic. Agricultural exports led the growth, with strong showings from banana, pineapple and decorative plant exporters.

Likewise, the sale of so-called café oro – or high-quality coffee sold at a significant markup – doubled compared to February 2007, coming in at $50.85 million.

Other strong performers include computer and electrical parts. Foreign Trade Ministry officials singled out Costa Rica’s burgeoning medical supplies manufacturers as a particularly bright spot. Over 30 multinational exporters including Baxter, Alergan, and Boston Scientific are now exporting an average of $660 million worth of medical products annually.

Meanwhile, the delays in implementing the free-trade agreement known as CAFTA continue to put a damper on textile exports.

Month-on-month textile manufacturing was down 16.6% in February, to $31 million.

The majority of that decrease came from slowing exports to the U.S. Representatives of the textile industry have said that putting the treaty in force would breathe immediate life into their business.

Agricultural exports to the U.S. also stagnated during February, and month-onmonth exports of processed food products to the U.S. dropped significantly, from $45.8 million to $28.4 million.

In other trade news, Costa Rica responded harshly to the European Union’s initial proposal for the free-trade element of the association agreement under negotiation between the EU and Central America.

Ruiz and the Costa Rican negotiators released a statement saying that the offer was “not satisfactory” and omitted “many of Costa Rica’s key exportable products.”

In addition, the offer would eliminate protective tariffs on only 66% of Central American products, a proportion similar to the amount of European products Central America offered to free up.

“Given the asymmetrical conditions between the two regions, we were hoping for a better offer from the Europeans,” said Roberto Echandi, Costa Rica’s lead negotiator.

The Central American negotiating teams are meeting in El Salvador this week to hammer out a unified negotiating position.